MUMBAI: The market value of half a dozen state-owned banks that declared their results fell to less than half of their gross bad loans — an indication that their worth is way below their obligation to recover loans and repay depositors.

Traders sold bank stocks on Wednesday, taking the BSE Bankex index to a 21-month low of 16,519.15.

The market value of the six listed banks that reported earnings was a combined Rs 37,119 crore, while their collective share of gross bad loans was more than double that amount, at Rs 1,00,592 crore.

Most banks are expected to report an increase in bad loans after the Reserve Bank of India directed them to proactively identify stressed loans as non-performing assets (NPAs) and make adequate provisions for them. Four of the six listed banks that have declared results posted losses.

A tax write-back of Rs 909 crore saved the day for Punjab National Bank, which reported a net profit of Rs 51 crore in the three months ended December. State Bank of India, the country’s largest bank, is expected to declare earnings of Rs 4,841 crore, according to a poll of analysts by Bloomberg, when it reports on Thursday.

Shares of Central Bank of India crashed 12.4% on the BSE after the lender reported a loss of Rs 836 crore, while Indian Overseas Bank fell 5.2% after reporting a Rs 1,425-crore loss. Allahabad Bank and Dena Bank reported losses of Rs 486 crore and Rs 663 crore, respectively, on Tuesday.

Indian Overseas Bank’s market value stood at Rs 4,078.69 crore, while its gross NPAs at the end of December were Rs 22,672 crore. Central Bank’s market value stood at Rs 8,987.84 crore while its gross NPAs were at Rs 17,563 crore. The gross NPAs of Indian Overseas Bank touched 12.64%, while for Dena Bank it was 9.85%, Central Bank of India 8.95% and Punjab National Bank 8.47% of the total loan book.